Bingaman Looks to Influence Cap-and-Trade Debate
Senate Energy and Natural Resources Chairman Jeff Bingaman (D-N.M.) on Tuesday staked out a role for himself in cap-and-trade policy, hosting a hearing on how to prevent price volatility in a cap-and-trade system.
It was the first of two hearings Bingaman scheduled this week. A second, on Thursday, will focus on the broader economic effects of climate change legislation. The move to host hearings on the subject is interesting, as ENR doesn’t have jurisdiction over the cap-and-trade provisions of a climate and energy bill. That falls to the Environment and Public Works Committee, chaired by Sen. Barbara Boxer (D-Calif.), who delayed the release of her climate bill until sometime later this month. Meanwhile, Senate Finance Committee Chairman Max Baucus (D-Mont.) seems likely to claim jurisdiction over the permit allocation and offset provisions of the bill.
Bingaman authored energy legislation, along with Lisa Murkowski (R-Alaska), that passed out of his committee in June and is expected to be combined with cap-and-trade policy. But it seems he also wants to play a role in shaping — or at least draw some attention to his views on — cap-and-trade.
Last year, Bingaman offered his own bill on the matter with Sen. Arlen Specter (D-Pa.), back when Specter was still a Republican. Their bill was less stringent than the climate bill that the Senate rejected last year, and included a so-called “safety valve” – a mechanism that contain costs for industries by automatically releasing additional carbon emission allowances into the market if the allowance price rises too high. Enviros don’t care for this approach; the point of an emission-credit system, they say, is to make it noticeably more expensive to pollute so industries will have an incentive to reduce their emissions.
It seems Bingaman wants to make sure his case for cost containment is heard again this year. “We need to provide assurances that the costs of a cap-and-trade system will not go out of control, either through excessive prices or excessive volatility,” he said at Tuesday’s hearing. “The purpose of today’s hearing is to explore some of the mechanisms that can be used to address these concerns.”